ACCA F4 CORPORATE AND BUSINESS LAW (uk) Note: These lectures or Handouts are updated on weekly basis. So those who have recently started F must read resi 1" week aw Introduction: © Full time theory A tough one (Don’t take it easy) Related law (Bounded with LAW) First of all complete core topics But very easy pattern (i.e. 10 questigNgachycatry 10 marks) 7 questions are straight forward én fning 3 are scenario based) TOPIC LIST: ore 70% Law of contract Law of contract: This law defines the relationship b/w the parties who are making contract. It covers duties responsibilities and legal obligation of the contracting parties. © You must keep in mind the theme of topics. © Give and take concept © Consideration ¢ Formal and informal contracts Company Law: Company law explains the rules and regulations, in which company is bounded, also cover the matters such as duties of the director's responsibilities of the auditors, responsibilities of the companies etc.Law of employment: This law covers the relationship b/w employer and employees, including the matters of appointment, removal and salaries. E.g, you are an employee, you did the contract actually and a formal document shows the contract b/w employer and employee. Law of partnership: ‘This law define the contractual relationship b/w two or more m® ending their duties and stakes in partnership On describe the Agency Law: The law governs the matter b/w a principle and an duties, rights and authorities of the principle and Principle: A person work on the behalf of Agent: ‘A party works on the “a Re ty Law of tort: © This law defines the omy ‘matter of negligence, the matter of trust passing and other m \s duties of care etcNow Detail study of each topic. Law of contract Contract is an agreement enforceable by law. It legally binds the parties, who mutually agreed & formed a contract. A contract is an agreement between two parties which is enforcea y An agreement is an understanding b/w two parties which is not gfaproseple by law According to the principle of freedom of contract parties @ gempetely unrestricted in deciding whether or not to enter into a and to the terms they agree Three essential elements of contract: There are three elements which are need: parties. g contract to be made between two © Offer and acceptance ee * Consideration ( ) + Intention to create ema nship Validity factor for' Capacity . Some pers WSbnly restricted capacity to enter into contract. Like minors (under jose who lack metal capacity or are intoxicated. k mntract in made in particular form. Such as shares transfer, lease ete Conten Like term whether expressed or implied, or whether some terms are overridden by statutory rules Genuine consent: ‘A mistake or misrepresentation made by one party may affect the validity of a contract, Parties may be induced to enter into a contract by undue influence or coercion Legality: The court will not enforce a contract which is deemed to be illegal or contrary to public policy.Types of contract A contract which doesn’t satisfy the relevant tests may be; void, voidable or unenforceable Void contract: (wrong start) Any contract which is done against validity factor. This isn’t a contract at all. The parties are not bounded by it an¢iNQey Wansfer property under it, they can sometime recover their good xe arty. Voidable contract: (occur after contract) ‘A contract which one party may set aside. Prope: efore avoidance is usually irrecoverable from third party. Unenforceable contract: (void contragg This is a proper contract but due to abs! can’t be enforced by the court, Offer: ( C Acceptance of any o! f any bargain “An offer is age w implied statement of the terms on which the maker is prepared togeWYm¥pctually bound if accepted unconditionally” Or OffegjsQeQpment of one party to enter into contractual relationship with another 4 ‘ed terms and conditions ome legal formalities the contract 18 a definite promise to be found on specific terms. A definite offer doesn’t have to be made to a particular person. It may be made to a class of person or to the world at large, and only the person or one of the person to whom it is made may accept it. pes of offers Express offer Specific offer General offer Counter offer Cross offerThe offer which is made in writing or verbally is called express offer Itis an offer that is made to a particular person or a group of person fily who may accept it. aR al son but to the én who complies It is an offer that is made not to a particular person or a public in general (open offer) and which is acceptab| with its terms and conditions. O, Itis the offer which introduce new termgagig cpntract despite accepting all the term of the offer first made. Such offer (S. ’be accepted or rejected by third party. (Second offer is countering ~~ i) Cross offer Two offers are called cro ly and if only + Terms of both offs ar§same * Subject matte! Gifers is same © Offers areynadfimultancously Such offers ef&¥gQ\eaeHt other (only theoretically) An offe t DB distinguished from the following; of information Stement of intension °Sinvitation to treat These are explained below: pply of informati When one party provide the information regarding the contract terms, this considered as supply of information not an offer Statement of intension: ‘A statement of intension for a contract is not an offer; offer must be crystal For example: advertising that an event such as an auction will take place is not an offer to sell, Potential buyer may not sue the auctioneer if the auction doesn’t take place.Invitation to treat: (come and make me an offer) This is defined as follow; “An indication that a person is prepared to receive offer with a view to gntering into a binding contract, for example; an advertisement of goods fox sfle or a company prospectus inviting offer for share. It must be distingui nin offer which require only acceptance to conclude the contract” Where a party is initiating negotiation he is said to hays ay tivitation to treat. An invitation to treat cannot be accepted to for contract, Examples of invitation to treat include: = tion sale QO + Advertisement (price list or newspapt fement) «Exhibition of goods for sale «An invitation for tenders Auction sale: cx In auction sales; The bid is the offef itsel The auctioncegig iN@gPaccept or to reject the offer. The bidders a offer and acceptance occur by the fall of auctioneer’s . Dispiay goods in a shop window or open shelves of a self-service shop or advertising goods for sale is normally an invitation to treat. An invitation for tenders: ‘A tender is an estimate submitted in response to a prior request When a person tenders for a contract he is making an offer to a per advertise a contract as being available An invitation for tender doesn’t generally amount to an offer to contract with the person quoting the lowest price, except where the person inviting tenders actually make it clear that he is making an offer ‘on who is.Termination of offer: (only for the personal nature not for company) In the absence of acceptance an offer can be terminated in the following ways; Rejection Outright rejection terminates an offer Counter offer: A counter offer is a final rejection of the original offer Ifa counter offer is made, the original offer may accept it, but iff sit his original offer is no longer available for acceptance However a counter-offer may of course be accepted be tht ipa offer Lapse of tis ‘An offer may be expressed to last for a specific €) If, however, there is no express time set, it ogpireNwlia a reasonable time Revocation of an offer: ® The offer may revoke hiss offer at fefore acceptance If he undertakes that his is Gay RM open for acceptance for a specific time thi he may nonetheless revoke it hit time, unless by separate contract he has bound himself to keep it Revocation may be ay exNessPtatement or may an act of the offeror His revocation doesn Uy agettect until the revocation is communicated to the offeree Revocation mfy be communicated by any third may who is sufficient reliable int dition: (condition of IF) hay be conditional in that it is independent on same event occurring or ‘ing change of circumstances. If the conditions not satisfied, the offer is not le of acceptance. Termination by death: The death of the offerce terminates the offer The offeror’s death terminates the offer, unless the offeree accepts the offer in ignorance of the death, and the offer is not of a personal nature, XXX